Argentina to join US minerals partnership to diversify supply chains from China

Argentina is joining a US-led initiative aimed at drawing more investment in critical-minerals mining, a State Department official said, part of an effort to create supply chains for the metals that don’t involve China.

President Javier Milei’s government will announce it’s joining the Minerals Security Partnership during a visit to Argentina this week by US Under Secretary of State Jose Fernandez. Argentina has vast resources of copper and lithium but has only tapped a tiny portion of them.

The initiative already includes 14 countries and the European Union. The strategy aims to ease dependence on China for minerals that go into electric vehicle batteries and solar panels by linking foreign investors with mining projects and adhering to strict environmental standards.

“It’s a way for Argentina to literally make pitches to 14 countries and the EU in one fell swoop,” Fernandez said in an interview before the announcement. “Producing countries want the kinds of investments that we’re proposing, investments that will benefit communities, that will bring growth, that will observe national laws.”

Launched in 2022, the US-led minerals partnership has so far resulted in high-level talks but few tangible investments. And while Milei is adamant about aligning with Washington, it will be tough to draw Argentina out of Beijing’s orbit given China is its largest trading partner after Brazil.

Before the announcement, the State Department welcomed people to register for an event in Buenos Aires on August 23 to “learn more about lithium and copper extraction opportunities in Argentina”. Describing the country as a global leader for new resource development, it added that “there are many lithium and copper projects available for investment across several provinces”.

The minerals agreement doesn’t address Argentina’s inability to qualify for incentives for lithium production under the US Inflation Reduction Act of 2022, a law aimed in part at speeding EV adoption. Argentina is currently locked out of those benefits because it doesn’t have a free-trade deal with the US, and Argentine officials have been seeking access.